Alaskan exporters have beaten Canadian rivals at scoring an international marketing coup: the first sale to China of liquefied natural gas (LNG) from North America. ConocoPhillips Alaska and Marathon Oil Co. scored the breakthrough in May, according to an international gas trade scorecard kept by the U.S. Department of Energy.

With supplies from the Cook Inlet region, the companies sold a 1.127 Bcf cargo from their LNG export site at Kenai, AK, to Shanghai LNG Co.’s import terminal in southern China, the department’s Office of Natural Gas Regulatory Activities said in a report on second quarter international gas flows.

The sale fetched a delivered price of US$10.50/MMBtu, or about US$11.3 million. But the deal was a once-only spot transaction, making the breakthrough too small and tentative to save the 42-year-old Kenai LNG plant from a previously announced suspension of operations (see NGI, Aug. 29).

Earlier this month ConocoPhillips took over Marathon’s 30% minority ownership for an undisclosed price and declared intentions to mothball the terminal. The last cargo was expected to depart for overseas this fall. ConocoPhillips kept open its options to restart the export operation or to convert Kenai into an import terminal for Alaskan utility supplies (see NGI, July 4).

The customer in the first Chinese sale is no big outlet for spot sales from roving liquefied-gas tankers. Shanghai LNG relies primarily on long supply contracts with Malaysia’s state-owned energy enterprise, Petronas.

China is a priority marketing target for two Canadian export projects on the Pacific coast of northern British Columbia at Kitimat, KM LNG and BC LNG. The KM group of Apache Canada, EOG Resources Canada and EnCana Corp. recently obtained a 20-year export license from the National Energy Board that enables them to negotiate long supply contracts sought by Asian LNG importers (see related story).

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